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Cyber Fraud

How to Protect Your Money from Cyber Fraud When Completing a Closing Remotely

By Tanya Svoboda
July 2020

Technology has empowered home shoppers with the ability to research, virtually tour, and then buy a house from start to finish without ever seeing it in person – including the closing. While much of the closing process has been digital since the early 2000s, others – like the notarization process – still required in-person meetings with physical documents and in-person signatures. During this time of social distancing, remote online notarization (RON) has increased in popularity. It’s important that home buyers be aware of the potential cyber risks involved with closing on their house online

Cyber Fraud Isn’t New

Even before COVID-19, the use of technology in the closing process has left buyers vulnerable to costly cyber fraud scams.  A common scam in real estate involves criminals hacking into email accounts and sending fraudulent wire transfer instructions. REALTOR® Magazine reports that according to the FBI’s Internet Crime Complaint Center, “Real estate mortgage closing scams are one of the top five wire fraud schemes.” These scams, according to REALTOR® Magazine, accounted for $150 million losses in 2018.

Moving more, if not all, real estate transactions online during COVID-19 has provided scammers with more opportunities to steal information for unaware buyers and sellers. While these threats are real and serious, arming yourself with knowledge and working with a trusted REALTOR® to create safe online procedures will allow you to buy a home remotely with confidence.

How to Protect Your Money During Remote Home Buying

1. Call, Don’t Click: A solid rule is to never click on a link or call a phone number sent through email. Scammers can hack into email accounts, delete emails sent by your actual REALTOR® or lending company and replace those emails with their own fake versions, effectively redirecting the funds you were sending to your lender, right into the scammer’s bank account.

At the beginning of the closing process, especially when the process is entirely remote, you should create a list of independently obtained phone numbers for your REALTOR®, your lender, and the title company. Use these numbers, not numbers provided in emails, to verify digitally received information.

WFG Title Company has developed an application, MyHome, that centralizes the entire home buying processes into one digital dashboard allowing home buyers and sellers to see where they are in the closing process. Patrick Stone, Chairman and CEO of WFG notes, “Unlike a lot of the first-generation status tracking programs, MyHome covers the entire settlement process, educating the borrower while tackling some of the service functions in support of the REALTOR.”

Like with any other online transaction that requires you to share sensitive information digitally, you should follow basic online safety guidelines.

  • Make sure you’re REALTOR, lender, and title agency are using encrypted email systems and document- sharing programs.
  • Use complex passwords.
  • Only conduct business using secure Wi-Fi connections.

2. Verify Instructions: The future of real estate may remain online, and while apps like MyHome make the process more clear cut, it is still advisable to verify instructions involving money transfers with your REALTOR® and lender using the phone numbers you obtained independently at the beginning of the process. The article COVID-19 and Wire Fraud notes, “It is extremely rare that wiring instructions will change during a real estate transaction, so verify any change with all parties before you adjust your actions.”

Once you have sent your money, the National Association of REALTORS® recommends, “within four to eight hours, call the title company or real estate agent to confirm they received your money.”

3. Take Quick Action if You Suspect Fraud: If you suspect you’ve been the victim of wire fraud, follow these three steps:

  • Call your bank or wire transfer company immediately and request a recall notice for your wire.
  • File a complaint with the FBI.
  • Report the claim to your local FBI office.

Taking these steps to protect yourself against cybercrime will make you a savvy home buyer and seller as procedures move online both now, during COVID-19, and after.


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